Agricultural Holdings Act, 1948, section 2 — Occupation of farm — Company’s right to enter — Licence converted by Act into yearly tenancy — Declaration in County Court annulled, no further order
This was an appeal by Mrs Ruth Snell, of Goldthorpe Farm, Oldcoates, Notts, from a judgment of Judge Flint at Worksop County Court on December 17, 1963, granting a declaration that TH Snell, Ltd, were entitled to enter the land and farm buildings at Goldthorpe Farm for so long as Mrs Snell held a tenancy of the farm from the head landlord.
Mr CA Settle, QC, and Mr T Dineen (instructed by Messrs Biddle, Thorne, Welsford & Barnes, agents for Messrs Hodding & Wordsworth, of Worksop) represented the appellant, and Mr P Stanley Price, QC, and Mr M Walker (instructed by Messrs Field, Dunn & Co, of Rotherham) appeared for the respondents.
Giving judgment, Lord Denning, MR, said that the farm belonged to a Mr Riddell, but Mr TH Snell was the tenant of it for some years. He lived in the farmhouse with his wife and son, John. On March 12, 1957, he turned himself into a limited company, he and his wife being the first directors. He had 7,000 shares, his wife 4,500, and the son was to have 2,950 shares when he became 21. Mr Snell died on May 29, 1958, and by his will he left provision whereby his widow was to be given a service agreement with the company for life but, on that agreement being executed, all his 7,000 shares were to go to his son at the age of 21. John was then 17. He became entitled to the shares in October, 1961, and then had control of the company. Unfortunately mother and son did not see eye to eye, and the mother determined to get rid of the son and the company from the farm. In September, 1962, she gave them both notice to leave.
Immediately after the father died, the question arose as to who should become tenant. Mr Riddell would not agree to the company, and would accept only Mrs Snell. He came to an agreement with her, a condition of which was that she was to reside constantly at the farmhouse and not part with possession of the farm. So the tenancy was with her, although in fact the company was in occupation of the farm in the sense that the accounts of the company were made up and carried on on the basis that everything on the farm belonged to the company. Indeed, the company took the profits. They did not pay the rent directly to the head landlord because he would not accept their cheque, but they paid the rent to Mrs Snell, who gave her cheque to the landlord. There was, however, nothing in writing — no agreement between the company and Mrs Snell |page:363| except what could be inferred from the conduct of the parties. The trial judge inferred that there was a licence to the company to occupy the farm for farming purposes. It was, he said, a contractual licence, and Mrs Snell must be taken to have granted it to the company to farm the land and take the profits. The licence, he said, was only in respect of the farm and the necessary farm buildings.
The question was — what right had the company to be there? The trial judge heard considerable argument as to the law of profit à prendre, and he held that there was a licence coupled with an interest. He thought there was a profit à prendre which was irrevocable during the time of Mrs Snell’s tenancy, and made a declaration that the company were entitled to be on the land for so long as Mrs Snell held the tenancy of the farm from the head landlord. But in the course of the argument on appeal it became plain that the legal position was really governed by section 2 of the Agricultural Holdings Act, 1948. Unfortunately, the trial judge had not been referred to the relevant position under that Act. Even before the Court of Appeal there had not been a cross-notice raising the point. But the Court, feeling that it was necessary to ascertain the true legal position, had given leave for a cross-notice to be given.
When one looked at the facts of the case, it seemed to him (his Lordship) a plain case of the application of section 2 of the Act. The court had been supplied with the accounts which the company kept of its dealings, and had that advantage over the trial judge. On the evidence and the accounts, it seemed to him (Lord Denning) quite plain that the proper inference from the conduct of the parties was that Mrs Snell granted a licence to the company to occupy the land for use as agricultural land. But there was no term as to duration. Nothing was said as to the length of that licence to occupy, nor about profit à prendre. There was an indefinite licence to occupy land for use as agricultural land. In those circumstances, it seemed to him (his Lordship) that under section 2 of the Act, the agreement took effect as if it was an agreement for letting the land on a tenancy from year to year. No modification was necessary at all. It was simply to be treated as between Mrs Snell and the company as if it were an agreement for letting the land on a tenancy from year to year. If that was so, it was quite plain that as between the parties that deemed tenancy had never been determined. It might not be necessary, perhaps, to give a 12-month notice, because section 23, subsection 1(c) did not apply, but at least there would have to be six months’ notice, which would expire at Old Lady Day on April 6, 1965. That seemed to be the earliest date at which it could be determined. It seemed, therefore, on the claim against the company that Mrs Snell must necessarily fail.
The remaining question was whether the declaration which the judge made as to the duration should stand. He (his Lordship) was quite satisfied that the Court could not make and should not make the declaration which the judge made. That declaration, under which he said that the company was entitled to be there as long as the widow was tenant, was not well founded at all. It seemed, therefore, that although the judge was right in dismissing the plaintiff’s claim against the company, nonetheless the declaration which he made must be removed and struck out. He (Lord Denning), would allow the appeal to the extent of annulling the declaration, but otherwise make no further order.
Pearson and Diplock, LJJ, agreed, and the appeal was accordingly allowed to the extent proposed. No order was made as to costs.
